As recently as 2003, it was considered absurd to talk of the decline of the United States. Now, however, such a belief has become common currency among theorists, policymakers, and the media. What significantly raised the awareness of this concept was, of course, the fiasco of the United States’ preemptive invasion of Iraq. What is not yet sufficiently appreciated is the precise nature of this decline and when it specifically began.

Most analysts contend that the United States was at its hegemonic apex in the post-1991 era when the world was marked by unipolarity, as contrasted with the bipolar structure that existed during the Cold War. But this notion has reality absolutely backwards. The United States was the sole hegemonic power from 1945 to approximately 1970. Its hegemony has been in decline ever since. The collapse of the Soviet Union was a major blow to US power in the world. And the invasion of Iraq in 2003 transformed the situation from one of slow decline into one of precipitous collapse. By 2007, the United States had lost its credibility not only as the economic and political leader of the world-system, but also as the dominant military power.

Since I am aware that this is not the standard picture either in the media or in scholarly literature, let me spell this out in some detail. I shall divide this account into three periods: 1945-1970, 1970-2001, and 2001 to the present. They correspond to the period of US hegemony, that of slow US decline giving rise to a creeping multipolarity, and that of the precipitate decline and effective multipolarity of the era inaugurated by US President George W. Bush.

Unquestioned Hegemony

The United States had been a rising world power since the 1870s, when it entered into steady competition with Germany to claim the succession as hegemonic power to the declining Great Britain. One way to think about the world wars is that they were really a single 30 years’ war in which the principal protagonists were the United States and Germany. From that standpoint, the unconditional surrender of Germany in 1945 marked the clear victory of the United States. That it required the military assistance of the USSR is no more significant than when Great Britain required the military assistance of Russia in 1815 to achieve a clear victory over France and assume its hegemonic position.

This 30 years’ war was quite destructive to infrastructure. In 1945, the United States was the sole major industrial power not to have suffered direct attacks on its physical equipment. In 1945, the United States was by far the most productive and efficient producer in the world-economy, to the point that it could out-compete all other countries even in their home markets.

On this economic base, the United States established its unquestioned hegemony. It created the types of international structures that would best serve its needs, such as turning Western Europe and Japan into political satellites. While it did partially dismantle its armed forces, it had a nuclear monopoly and the air force with which to deliver these bombs anywhere in the world. At the same time, New York City became the cultural capital of the world, displacing Paris in almost every artistic and literary domain.

Of course, the United States still faced a challenge from the Soviet Union, which had a very powerful military structure and a desire equal to that of the United States to impose its ideological preferences on other nations. On the other hand, given the massive destruction caused by World War II, the Soviet Union had no desire to engage in a military confrontation with the United States. So the two countries struck a deal, which was symbolically termed Yalta. The deal had three components. First, the world was divided into two blocs, whose boundaries were defined by the location of the respective armies in 1945: the Soviet Union controlled one-third of the world and the United States two-thirds. The arrangement was that there would be a military status quo, with neither power seeking to change these boundaries.

The second part of the deal was economic. The United States needed to assist in the rebuilding of significant zones of the world-economy, both to secure nations’ political allegiance and to create export markets. But the United States saw no advantage in rebuilding the Soviet Union or its new satellites in Eastern and Central Europe. So the countries agreed that the two blocs would be largely self-contained economically. The Soviet Union built COMECON to secure its zone, while the United States entered into multiple economic and financial arrangements with its allies.

Third, each side created strong and lasting military alliances. The United States relied on NATO and the US-Japan Defense Pact, and the Soviet Union created the Warsaw Pact. The point of these military alliances, however, was not to use them offensively against each other but to retain the ability to riposte if necessary. It was also to secure the complete subordination of their so-called allies to the political decision-making of Washington and Moscow. Thus, inherent in the third part of the deal was that each side would hurl invectives at each other very loudly—not to incite real action against the other, but to ensure that their allies did not deviate from the party line.

This deal held very well throughout the Cold War, for there was no warfare between the United States and the USSR. There were, to be sure, mini-crises—the Berlin blockade, the Korean war, the Quemoy-Matsu affair, Hungary in 1956, the Cuban missile crisis, Czechoslovakia in 1968, and Afghanistan in the 1980s. But each of these ended at the status quo ante. Indeed, the boundaries of the two blocs remained virtually unchanged up to 1989. The shouting, of course, never ceased, although it may have been louder and softer at various points. However, in the end, it was still only shouting. In the same way, the two economic zones remained separate until the 1970s, at which point there began a slow entry of the “socialist” bloc into the trade and financial channels of the capitalist world-economy.

We can call the period from 1945 to 1970 the period of unquestioned US hegemony because the United States was able to get 95 percent of what it wanted 95 percent of the time on all important questions. However, there were two potential wrenches in the works. The first was that the United States was so successful in helping Western Europe and Japan to recover that, by the mid-1960s, both zones had reached virtual economic parity with the United States, as measured by two simple facts. First, by the 1960s, it was no longer true that United States’ producers could out-sell Western European or Japanese producers in their home markets. Indeed, the opposite was now true. Western European and Japanese producers began to enter the US home market. And secondly, the rest of the world had become a zone of direct competition between producers from all three zones in the North. The United States no longer had any particular advantage over its allies—a development that would have significant political consequences.

The second potential wrench was the attitude of the developing world. The US-Soviet deal was beneficial for both parties, but it was less beneficial for the countries of the developing world. As a result, the more militant movements in the developing world simply pursued their own interests. Indeed, by the end of this first period, it had become clear that neither the United States nor the Soviet Union was in a position to slow down the drive for national liberation in the developing world.

The world revolutions of 1968 marked a decisive turning point for both US and Soviet strength in the world-system. The multiple revolutions that occurred between 1966 and 1970 shared two characteristics. On the one hand, they all denounced US hegemony as well as Soviet collusion with US hegemony—that is, the Yalta deal. But they also denounced the traditional antisystemic movements—what began to be called the Old Left.

The Old Left was comprised of three components—Communist parties, Social-Democratic parties, and national liberation movements. All three of these components affirmed a two-step strategy: first to conquer state power, and then to change the world. The period of 1945 to 1968 put this strategy to a severe test. For in this period—the very era of unquestioned US hegemony—the three varieties of antisystemic movements that had composed the Old Left up until then had come into state power almost everywhere. In the Soviet bloc, Communist parties were ruling, and in the pan-European world, Social-Democratic parties—defined loosely to include the British Labor Party and New Deal Democrats in the United States—had come into power as well. To be sure, it was “alternating” power, but the alternate more conservative parties had almost all committed themselves to the key ingredients of social-democratic policy: the welfare state.

The revolutionaries of 1968 concentrated on the second step—changing the world—and they found the Old Left regimes very wanting. Those who rose up in 1968 denounced the Old Left as having become part of the very problem they were supposed to overcome. This attitude led to disillusionment with the concept of developmentalism, which had been asserted as the universal road to equality. The language was different in the United States, the Soviet Union, and the nations of the developing world, but the essence was the same. Developmentalism was the thesis that all states could “develop” and have a high standard of living, if only the appropriate state actions were instituted to permit the process of development to take off. Even the particular recommendations of the United States and the Soviet Union were not substantially different: strengthen the urban sector, expand education, engage in judicious protectionism, mechanize production, and copy the patterns of the leading state. The problem was that this prescription was not working.

Gradual Decline

It became quite clear to those in power in the United States that the post-1970 situation was different, and the leadership adjusted accordingly. The key objective of all presidential regimes from Nixon to Clinton was to slow down the structural decline of US power and authority in the world-system. They developed a three-pronged program to achieve this goal.

The first step for the United States was to keep Western Europe and Japan from feeling that their new economic strength allowed them to renounce US “leadership” and to pursue a world political policy different from that of the United States. The solution that the United States proposed was for Western Europe and Japan to cease to be satellites and now become partners in the implementation of common world policies. This partnership was institutionalized in various forms—the Trilateral Commission, the G-7, and the World Economic Forum at Davos—and is today what we retrospectively call “multilateralism.” This strategy worked to a certain extent: the Europeans and even the Japanese strayed, but they did not stray far. The Europeans built a gas pipeline with the Soviet Union against US wishes, and they tried to start a European defense force. But under the pressure of the United States, they defined this defense force as working within the framework of NATO. Generally speaking, up to 2000, it could not be said that Europe and Japan had broken with the United States on any fundamental issue.

The second adjustment was military. The US monopoly on nuclear weapons was broken first by the Soviet Union, then France, and then China. The five permanent members of the Security Council all possessed nuclear weapons by 1970, but the United States and the Soviet Union defined these weapons as being contained by a “balance of terror” (that is, they were non-usable except in true defense). The other three acceded to this definition. However, these five powers were not the only ones to engage in nuclear programs: there were probably a dozen others that had already started along this path by 1970. The United States saw clearly that proliferation could present a serious threat to its military power, since even a few bombs in the hands of a middle power would be enough to allow that power to enter into the “balance of terror” and annul US military advantages.

The United States’ efforts to halt nuclear proliferation were partially successful. Three countries refused to sign the non-proliferation pact—India, Pakistan, and Israel—and of course, all three would eventually acquire nuclear weapons. These were the failures. But we must also note the many successes—at least Brazil, Argentina, Sweden, Egypt, South Korea, Taiwan, and possibly Germany and Japan closed down their programs. By 2000, the United States appeared to have contained proliferation to an extent.

The third arena was economic. In about 1970, the world-economy entered a long phase, during which the rate of profit from productive activities declined, unemployment increased, and global polarization accelerated. The easy profits of the trentes glorieuses (as the French call the earlier period) were over. Among what was now called the Triad (the United States, Western Europe, and Japan), there was to be acute competition from 1970 onwards, as all three attempted to minimize the damage to their own economic zones. They engaged in a process of exporting unemployment to one another, and they began to shift from seeking profits from production to seeking them through financial speculation.

Above all, the United States, Europe, and Japan could no longer afford to promote “developmentalism.” They needed to ensure a greater flow of capital from the Third World to the North. As a result, a new ideology was born: neoliberalism, justified by something called “globalization.” A norm was established in which there could be no alternatives to opening the frontiers of the developing world to exports from the North and the free flow of capital back to the North.

Because the economic decline of the 1970s severely affected the balance of payments of states in the South, causing them to seek loans on the world market, the IMF stepped in with the loans and a package called “structural adjustment,” which meant conforming to the new ideology of the Washington Consensus. To ensure that this would have a lasting effect, the newly-created World Trade Organization was programmed to enact a series of measures depriving countries in the South of the right to reverse any of these new practices—all in the name of promoting free trade. As a policy, this was also quite successful. The United States had gained many economic advantages by the 1990s. One country after another, not only in the developing world but also in the socialist bloc, succumbed to the pressures. Developmentalist language disappeared and was replaced by globalization jargon—in the media, in scholarly discourse, and above all, among the politicians of erstwhile left-of-center parties.

Of course, there were problems in this period as well—the collapse of the Soviet Union, for example, and the fact that neoliberalism was not paying off for the countries of the South. The collapse of the Soviet Union was unexpected and, if truth be told, undesirable to the United States. Eliminating the Soviet Union as a structure meant the loss of a symbolic opponent that ensured the unity of the political alliances of the United States. There was no longer a hypothetical enemy against which to rally the domestic population and allied states. In addition, the loss of the Soviet Union meant the end of a decades-old, collusive partnership between the two states—there was no longer a rival big brother to hold (or at least to try to hold) its Third World allies in check.

Unable to halt the disintegration of the Soviet Union, the United States made the best of a bad situation and proclaimed “victory” in the Cold War. But from a geopolitical point of view, it would turn out to be a remarkably empty victory. The first obvious consequence was Saddam Hussein’s invasion of Kuwait. With no Soviet Union to hold him back on the grounds that he might upset the nuclear “balance of terror” between the United States and the Soviet Union, Hussein had no significant reason not to invade.

Of course once Iraq did enter Kuwait, thereby implicitly threatening Saudi Arabia, the United States felt that it had to act. And in fact, it acted rather prudently—assembling a massive military coalition and getting four countries (Germany, Japan, Saudi Arabia, and Kuwait) to provide the bulk of the funds for the operation, reducing the cost to the United States to almost nothing. Hussein and his regime still survived, however, creating a telling reminder of the the limits to real US power.

Meanwhile, the now dismantled “socialist” bloc as well as the multiple erstwhile developmentalist states in Asia, Africa, and Latin America had embraced globalization and its requisite reforms. However, the gains allegedly offered by globalization were by no means universally realized. Indeed, it was not long until the citizens of the developing world realized that neoliberalism was just as false a promise as developmentalism, if measured by the degree to which it promoted world equality.

By the mid-1990s, the tide had begun to turn. On January 1, 1994, the day on which the North American Free Trade Agreement came into effect, the Zapatistas led an uprising in Mexico’s poorest area, Chiapas. They demanded effective autonomy for the indigenous populations of the region and assumed the mantle of all those fighting for equalities in the domains of social life. They reached out to a world audience for support, which transformed them into an icon for the peoples of the South.

This event was followed in 1999 by the remarkable confrontation at the Seattle World Trade Organization conference, where demonstrators from around the world, but particularly from the United States, disrupted the meetings and forced them to an effective halt. The most unexpected aspect of this demonstration was that it managed to unify three kinds of groups that had previously kept a great distance from each other—the trade unionists, the environmentalists, and the anarchists.

Indeed, Seattle was politically successful to the degree that a series of similar demonstrations all over the globe followed whenever and wherever interstate institutions met. These organizations responded by arranging meetings in countries where visas could easily be denied or in places which would be difficult to access. The world’s most powerful players had been forced out of their own countries, and the strategy of resisting decline seemed to be growing less and less successful.

The Era of Unilateral Machismo

In 2001, George W. Bush became president of the United States, surrounded by a gaggle of neoconservative politicians and advisors. The analysis of these individuals was that the United States was indeed declining. However, in their view, this was not due to structural pressures from within the world-system, but rather to defective leadership manifested by all the previous presidential administrations from Nixon to Clinton (including that of Reagan). Their hypothesis was that a unilateral invasion of Iraq would definitively demonstrate the military power of the United States, the futility of political independence for Western Europe and Japan, the danger for any rogue state to think of acquiring nuclear weapons, and the urgency for moderate Arab regimes to accept Israeli terms for a permanent settlement of the Israeli-Palestine dispute. In short, they believed that machismo would work.

The Al Qaeda terror attacks of September 11, 2001 provided the necessary trigger for implementation of this program. President George W. Bush assumed the role of wartime president and proceeded to invade Iraq—against significant opposition from traditional allies and enormous hesitancies from within the military and intelligence community. Within a few weeks of the invasion, President Bush had proclaimed victory. But of course the war had just begun, and the situation quickly deteriorated both militarily and politically. By 2007, it was clear to most people, including most US citizens, that the war had indeed been lost.

The entire analysis of the neoconservatives turned out to be invalid. The war was not easily won. The reluctant allies were not intimidated into renouncing aspirations for independence. North Korea and Iran sped up their nuclear programs, recognizing that the reason the United States felt free to invade Iraq was that it did not yet possess nuclear weapons. And the Arab regimes were no closer to accepting an Israeli solution than they were before. In short, the entire endeavor had turned into a fiasco.

But the most important consequence of this unilateralism was the exposition of the severe limitations of US military power, which turned out to be essentially unusable. Military power is generally termed ineffective when a state cannot send in enough land troops to stabilize a conquered territory, which certainly was the case with the US intervention in Iraq. Whenever a state uses military force, anything less than overwhelming victory actually reduces that state’s real military power. And this is why, by 2007, it had become common currency to talk of the decline of the United States. Many in the United States feel that the solution to this dilemma is a return to the “multilateralist” program of the 1970s, 80s, and 90s. However, Bush has undone that. No one is prepared to allow the United States to be anymore the unquestioned leader in the world-system, even if it professes multilateralism. Yet the reality is that the United States has been reduced to the position of being one strong power in a multipolar world. It is also destined to become even less influential as the world moves forward in this new geopolitical situation.

The adventurism of the Bush administration has transformed a slow US decline into a precipitate decline. The United States’ economic, political, and ideological position had already become tenuous by 2001. The only advantage the United States seemed to retain was in its absolutely enormous military capability, and it was on this power that Vice President Dick Cheney, former Secretary of Defense Donald Rumsfeld, and the neoconservative policymakers were relying. But they made two fundamental mistakes.

The first was failing to realize that air power and special forces are sufficient to make the armed forces of even strong powers retreat, but they are not able to bring wars to a conclusive end. For that, land armies are necessary—and against popular resistance, very large land armies. But the United States does not and will not have a significantly large land army primarily due to political reasons. The US public is ready to cheer on military victories, but they are not ready to sacrifice the lives of their children. Invasions like those of Iraq are thus destined to fail.

And that leads to the second mistake of the neoconservatives. Military power is feared as long as it is successful. But anything less than overwhelming victory reduces the fear of others, and therefore the effectiveness of expensive and advanced military hardware as an intimidating factor in world politics.

In the 1990s, Secretary of State Madeleine Albright is said to have exploded in a discussion with Colin Powell and other military leaders who were reluctant to engage in an initiative that she was pushing. She asked: “What is the point of having the most powerful armed forces in the world if one can never use them?” The answer, as we can now see clearly, is that there is not much point at all.